Correlation Between Outokumpu Oyj and Live Ventures
Can any of the company-specific risk be diversified away by investing in both Outokumpu Oyj and Live Ventures at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Outokumpu Oyj and Live Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outokumpu Oyj and Live Ventures, you can compare the effects of market volatilities on Outokumpu Oyj and Live Ventures and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Outokumpu Oyj with a short position of Live Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outokumpu Oyj and Live Ventures.
Diversification Opportunities for Outokumpu Oyj and Live Ventures
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Outokumpu and Live is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Outokumpu Oyj and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and Outokumpu Oyj is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Outokumpu Oyj are associated (or correlated) with Live Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Ventures has no effect on the direction of Outokumpu Oyj i.e., Outokumpu Oyj and Live Ventures go up and down completely randomly.
Pair Corralation between Outokumpu Oyj and Live Ventures
Assuming the 90 days horizon Outokumpu Oyj is expected to generate 0.68 times more return on investment than Live Ventures. However, Outokumpu Oyj is 1.48 times less risky than Live Ventures. It trades about -0.05 of its potential returns per unit of risk. Live Ventures is currently generating about -0.08 per unit of risk. If you would invest 514.00 in Outokumpu Oyj on August 31, 2024 and sell it today you would lose (149.00) from holding Outokumpu Oyj or give up 28.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 61.42% |
| Values | Daily Returns |
Outokumpu Oyj vs. Live Ventures
Performance |
| Timeline |
| Outokumpu Oyj |
| Live Ventures |
Outokumpu Oyj and Live Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outokumpu Oyj and Live Ventures
The main advantage of trading using opposite Outokumpu Oyj and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outokumpu Oyj position performs unexpectedly, Live Ventures can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Live Ventures will offset losses from the drop in Live Ventures' long position.| Outokumpu Oyj vs. Live Ventures | Outokumpu Oyj vs. WiMi Hologram Cloud | Outokumpu Oyj vs. Zhihu Inc ADR | Outokumpu Oyj vs. BCE Inc |
| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Haverty Furniture Companies | Live Ventures vs. Kingfisher plc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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